- Category: Business
16 Feb 2016
Orkla, a Norwegian supplier of branded consumer goods, has initiated consultative negotiations with the entire staff of its traditional crisps factory in the Åland Islands as part of its effort to bolster its long-term competitiveness.
Pasi Flinkman, the managing director of Orkla Confectionery & Snacks Finland, confirms in an interview with Uusi Suomi that closure is one of the three options under consideration.
“We've weighed a number of options from the very beginning: the first is developing the factory further, the second is transferring parts of the factory elsewhere and the third is transferring the all of the factory's production operations elsewhere. We're still reviewing and weighing up all of the options. We've yet to commit to any of them,” he stresses.
The closure of the crisps factory, which entered into commercial operation as early as in 1970, would have ramifications for two well-known product families in Finland – Oolannin frozen food products and Taffel crisps. The former, in particular, is so closely associated with the country that manufacturing the products abroad, from foreign raw materials, would hardly be straightforward, acknowledges Flinkman.
“Its roots are so deep in Finland that transferring production abroad would be difficult. It would require a clear shift in marketing communications because the brand has been built on its home-grown nature,” he explains.
The transfer would not be as problematic for the other products manufactured at the site: the production of Kartanon crisps, for example, was not transferred from Sweden to the Åland Islands until the production capacity of the factory was cranked up by 30 per cent in 2014.
Flinkman assures that the possible transfer would not risk the return on the roughly million euro investment required by the expansion as the production lines can be shipped to the other factories of Orkla in shipping containers. “Orkla has several factories with comparable technology and production in the Nordics and Baltics,” he highlighted in a press release earlier this month.
The press release also indicated that the confectionery and snacks producer is weighing up its manufacturing footprint due to the amount of capital it has tied up in the maintenance and operation of its factories.
The closure of the factory in the Åland Islands would be a blow for the entire potato production industry of Finland as Orkla is only using Finnish-grown potatoes in its factories in Finland. “We've used Finnish potatoes exclusively in our Finnish factories, but nowhere else. It'd certainly be bad news for the farmers. That's one aspect we have to take into consideration,” says Flinkman.
A spokesperson for the Central Union of Agricultural Producers and Forest Owners (MTK) revealed in an interview with Helsingin Sanomat that the factory in question is the destination of all potatoes produced in the Åland Islands and as many as five per cent of the potatoes produced in Finland.
The factory processes roughly 280,000 tonnes of potatoes a year.
Orkla should according to Flinkman consider using Finnish-grown potatoes at its production sites abroad if it decides to shut down the factory in the Åland Islands. “We're very conscious of our significance for the country and, especially, for the Åland Islands,” he affirms.
He also points out that if the conglomerate decides instead to develop its factory, it could drive up demand for home-grown potatoes.
Aleksi Teivainen – HT
Photo: Antti Aimo-Koivisto – Lehtikuva
Source: Uusi Suomi